Located at 2710 Delta Fair Blvd., the property was fully occupied at the time of sale. Tenants include FoodMaxx, Blockbuster, Better Homes & Gardens, Taco Bell and Money Tree. Michael Federle of Grubb & Ellis' San Francisco office represented the buyer in the transaction. Federle and Ray Devlin of Grubb & Ellis' Walnut Creek office represented the seller.
"This transaction was challenging in that we had two anchor tenant bankruptcies during escrow," says Federle. "However, we were able to secure a replacement grocery tenant and deliver to the buyer a completely leased investment."
Federle tells GlobeSt.com that shortly after the property came to market early last year, Fleming Cos., the parent company of the grocery store operator, filed for bankruptcy. Then Modesto, CA-based Save Mart tied up the location along with 26 other Fleming-operated properties, but the fair trade commission eventually excluded the Antioch location from the deal. Finally, after protracted negotiations with the fair trade commission, Birmingham, AL-based Bruno's Inc. was allowed to put a FoodMaxx store in the location.
"That threw us back about six months," says Federle. "Then we got back in the groove, went into the market and, after one deal fell through, we found the trust. That's when Factory 2-U Inc. filed for bankruptcy."
Things moved along more quickly this time around, however, as Factory 2-U was able to secure DIP financing and continue paying its rent, says Federle. An additional complication in the sale, and the reason the buyer that preceded the trust walked away, was that a loan carrying an above-market interest rate had to be assumed as part of the transaction.
The trust will be able to pre-pay the loan in about four years, says Federle.
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